Realtors are encountering a growing number of buyers backing out of home purchases, as increased selectiveness emerges in a challenging real estate market.
According to a report from Redfin released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage of June cancellations recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers being more selective, driven by the soaring costs in the housing market. She explains, “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list.”
Rafael Corrales, a Redfin agent in Miami, has observed similar patterns, reporting “nightmare scenarios” where last-minute cancellations occur over trivial details. In Miami alone, approximately 2,500 home purchases were canceled last month, making up around 17.6% of the contracts signed in June. Corrales pointed out that the primary concern remains the affordability of homes.
In June, the median home sale price hit a record high of $442,525, while the average rate for a 30-year mortgage rose to 6.92%. Alongside the steep prices of homes, potential buyers are contending with various additional costs, including insurance, property taxes, and homeowners association fees, all of which have been inflated by rising living costs.
This widespread lack of affordability has led to a significant decrease in home sales nationwide, marking the largest drop in eight months, according to Redfin. Sales fell by 0.5% on a month-to-month basis in June, representing the most substantial decline since October 2022. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than the levels observed before the pandemic.